The EB-5 Investor Visa was created by an act of Congress in 1993, and it has proved to be a critical driver in American job creation since its inception.
By some estimates, the program has brought in over $20.6 billion in Foreign Direct Investment (FDI) at no cost to the American taxpayer. The program has undergone a series of drastic changes since November 21, 2019; most significantly the minimum investment amount was increased from $500,000 to $900,000. The minimum investment amount is even higher in non-Targeted Employment Areas ($1.8 million).
With the increase in investment amount, interest in the visa declined significantly. This decline in interest, coupled with a new USCIS policy that led to petitions being adjudicated based on a visa availability approach (as opposed to a first-in, first-out approach) is reflected in the visa bulletin; India is now current in the EB-5 category, and Vietnam and China have progressed significantly.
As the United States looks for options to spur economic recovery in the wake of the COVID-19 pandemic, the EB-5 program, with its job creation requirements, seems like a logical option. However, recent developments have put the program at risk.
Traditionally, the EB-5 regional center program has been tied to Congress’ omnibus spending bill. This means that whenever Congress passes the omnibus bill, the EB-5 regional center program would automatically be re-authorized. While the Consolidated Appropriations Act of 2021 extended the program through June 30, 2021, it disjointed EB-5 re-authorization from future omnibus bills. This means that Congress must re-authorize the EB-5 regional center program as a standalone bill.
While the benefits of the programs are well known, the EB-5 program has undergone considerable media coverage. Anti-immigration rhetoric is also playing a part in the discussion. Together, this makes EB-5 re-authorization in June 2021 uncertain.
The EB-5 Reform and Integrity Act
Senators Chuck Grassley (R-IA) and Patrick Leahy (D-VT) have introduced the EB-5 Reform and Integrity Act. The bill provides for some crucial changes that would likely safeguard the EB-5 program’s longevity. This includes a five-year authorization for the EB-5 Regional Center Program, protections for innocent investors who have invested into disbarred projects, and increased oversight for regional center programs. The EB-5 industry has welcomed the bill, with the understanding that increased oversight will lend more credibility to the program and appease the program’s detractors. The economic effects of the COVID-19 pandemic provide compelling grounds for both re-authorization and reforms, and the program has brought in billions of dollars of investment and created thousands of American jobs.
The Jackson Lewis team will continue to monitor developments in the EB-5 program and provide updates.